Morgan's Markets Logo

March 12, 2019

While checking over cows the last few days I have seen some that are just plain worn out. The weather has been tough on them, and even though they are being fed well, they all look like they need 30 days of sun and some green grass, which may be awful hard to find.

The clients I talk to in Tennessee aren’t getting the snow like we are, but they are getting a tremendous amount of rain. We experience this extreme type of weather very seldom, but when I was in my teenage years, I remember a lot of tough winters doing chores, trying to keep the water open and getting feed to the livestock. The biggest problem was with snow removal. We were always armed with a set of chains and a tractor with a 6-volt battery that didn’t want to start very well.

We can now move snow in a fraction of the time that it took in the 1950s and 1960s. For as bad as it is, it looks as if it will take a miracle to get things cleared off in time for planting, but hopefully it will happen.

Last week box meat moved higher. The box meat charts, which I consider more accurate than the cattle charts, look like they want to go back up to $233, which is an old high and stopped the box meat before. Cash cattle traded $128.50; $205 hanging. The Cattle on Feed report was pretty much as expected with no big surprises. The marketing figure was good, which is always the one you look for first.

We still have a lot of cattle to move and placements could be a little bit slower than expected. Last week feeder cattle and live cattle closed strong — partially on the Goldman Roll and partially with anticipation that cattle were going to trade higher. Monday morning we gapped open lower on both cattle and feeders. We will need to see this market recover, probably by Wednesday, to hold it together.

Funds are big long in the cattle market. We probably have the funds long cattle, short hogs.

Monday and Tuesday we have set the cattle market back. It looks to me like there is a pretty good chance we have put the high in the cattle market. To counter this we need a pretty decent run in cash cattle.

This weather has been tough on all stages of livestock production and procurement. I feel as if cattle producers are sick and tired of the lousy conditions in the lots and will move cattle just to get them out if these poor conditions continue to exist.

The hog market has finally caught life and we expect for hog sales to begin improving overseas. We did see that on export sales in pork to China. Up until then a lot of the pork has been going through Taiwan. Now the Chinese themselves have finally taken some pork.

I’ve talked about the churning in the grain market. We have finally broken to the downside which I thought would be the direction to come first. Now we have to see if we broke out to the wrong side and make a stand at these levels. Exports have been fairly decent but nothing of the scale that is needed to make this market want to turn back up.

We continue to see the tariffs in place and more promises than results in regard to solving the trade war. We have been at this since July, which means we have lost a lot of trade with China and it should take quite a long period of time to reestablish our trade.

The wheat market has finally come around from the terrible beating it has taken in the last month. It was a market that let us down, and it could be the first one to turn. We need to watch it closely. Bean exports are down 32 percent from last year. Wheat exports are down 6 percent. Corn exports are up 31 percent.

Good luck and good marketing.

This weekly report is for informational purposes only and is not to be construed as an offer to sell or a solicitation to buy the commodities listed herein.